As you all know by now, my world is largely limited to tax related employment - mostly in the Western United States with an emphasis on Colorado. However, I talk to colleagues that recruit in a lot of other disciplines and geographic areas, so I’m not unaware of what’s going on outside my niche. And, I think the tax space in Colorado is pretty representative of what’s going on across the country.
We have seen consistent wage growth year after year since about 2010. Although in 2020 we saw salary and bonus cuts, layoffs and delayed promotions; this year we are seeing companies and firms do all they can to make up for lost time. Just in Q3 of this year I have seen a significant increase in hiring activity in tax, much of it fueled by public accounting firms trying to staff up before the fourth quarter rush. According to recent information published by the Bureau of Labor Statistics, the quit rate is now at 2.9%; which is the highest it’s been since the year 2000 when they started tracking this information. The quit rate is the rate at which people are quitting jobs voluntarily. As you would expect, there was a precipitous drop in the quit rate at the beginning of the pandemic, but it’s been steadily increasing since that time. The quit rate is highest in the hospitality and food service industries, but all sectors are seeing higher numbers of people leaving careers and gainful employment. Couple this with the fact that tax has seen a widening gap between supply (tax just ain’t sexy enough) and demand (the complexity and exposure require more staff), and you have a bonafide labor shortage in tax.
For employees this translates into more power. Power to seek increased compensation, power to find the right mix of in-office and remote work and power to be selective in a job search. Employers, on the other hand, are scrambling to keep up with the salary demands of both new hires and their current employees. They are trying to navigate the issues of employee “workplace” and doing all they can to fill positions in a hyper competitive market.